Section FH · Hardship

Hardship arrangements and your credit report

If you and your credit provider agree a financial hardship arrangement, your report shows a mark beside the repayments concerned, ‘A’ for a temporary arrangement or ‘V’ for a permanent one, and not the reason for it. A credit reporting body can’t use that information to calculate your credit score, and the marks come off a year later: a year after the last repayment under a temporary arrangement, or a year after a permanent one starts.

General information, not financial or legal advice. Check the current rules with the OAIC’s pages on financial hardship information and Moneysmart’s financial hardship page.

FH.1Two kinds of arrangement

If you can’t meet your repayments, you can ask your credit provider to change them, or it may offer. If it agrees, it may enter a financial hardship arrangement with you, and it must tell you your new repayment obligations and whether the change is temporary or permanent.

Temporary and variation arrangements
FeatureTemporaryVariation (permanent)
What changesFor a set period, you pause repayments or pay a reduced amountYour repayment obligations change permanently, under a new contract
AfterwardsThe original repayments keep accruing, so you will be in arrears when it endsYou won’t be in arrears, because the repayments themselves have changed
The markAV
Where it appearsAgainst each repayment during the arrangementAgainst the repayment when the arrangement started
RemovedOne year after the arrangement’s final repaymentOne year after the arrangement started

The OAIC’s example of a variation: a $3,000 loan due to be paid off in 3 years is extended so it can be repaid over 4.

FH.2The OAIC’s own example, drawn

From the OAIC’s worked example
  1. Jul 2022A
  2. Aug 2022A
  3. Sep 2022A
  4. Oct 2022A
  5. Nov 2022·
  6. Dec 2022·
  7. Jan 2023·
  8. Feb 2023·
  9. Mar 2023·
  10. Apr 2023·
  11. May 2023·
  12. Jun 2023·
  13. Jul 2023·
  14. Aug 2023·
  15. Sep 2023·
  16. Oct 2023gone
A temporary arrangement from July to October 2022 puts an ‘A’ against each of those repayments. From October 2023, the report no longer shows an ‘A’ against any of them. Months marked · sit outside the example.

For a variation, the year runs from the start: an arrangement from July 2022 has its ‘V’ removed from July 2023.

FH.3What the report shows, and what it leaves out

A repayment history shows only whether a repayment was on time, overdue, or part of a temporary or variation arrangement. It doesn’t show why you needed the arrangement.

The OAIC explains why the marks are there at all: they give other credit providers a fuller picture of your current repayment obligations without intruding into the reason. If a credit provider wants to know the reason, it must ask you, and whether you tell it is your call.

The score. A credit reporting body can’t use financial hardship information to calculate your credit score. Moneysmart: a financial hardship arrangement does not affect your credit score, and as long as you stick to it you are shown as up to date.

Since 1 July 2022, a credit provider must tell a credit reporting body that it has a hardship arrangement with you and whether it is temporary or permanent, and the credit reporting body must show it. Before then there was no way to show an arrangement on a report. The credit provider must also tell you, as soon as possible, that it will do this.

FH.4When an arrangement starts

An arrangement starts when you and your credit provider both agree to it, not when you first ask for help. It may be backdated to the day you asked if:

  • the credit provider unreasonably or unnecessarily delayed agreeing to it
  • the credit provider considers the earlier date more accurately reflects when it should have started
  • you couldn’t ask earlier because of circumstances beyond your control, such as illness or a natural disaster

While a credit provider is deciding a hardship request, and for 14 days after telling you it has refused, it can’t list a default, unless it reasonably believes the request repeats one made on the same basis in the previous 4 months.

FH.5What doesn’t count as an arrangement

  • A promise to pay. Calling your credit provider and promising to pay later is not a financial hardship arrangement, and doesn’t carry the same protections. Missed payments are recorded in your repayment history, and may affect your score, even if the provider acknowledged the promise.
  • Other short-term measures. A credit provider may instead offer something that isn’t a hardship arrangement, such as a once-off short payment extension, or a forbearance or indulgence.
  • Some kinds of account. Not every credit product can be included: a phone contract can’t, for example. Moneysmart says your credit report will not show an arrangement you make with a buy now pay later, phone, internet or utility provider.

How to ask for hardship assistance is set out on Moneysmart’s financial hardship page. It notes that your lender must consider you for it when you ask.

FH.6If it is shown wrongly

If you think an arrangement is shown wrongly, the OAIC’s order is: raise it first with your credit provider or the credit reporting body; then, if you’re not happy with the response, their external dispute resolution scheme, such as the Australian Financial Complaints Authority; or a complaint to the OAIC. The time limits for that process are in fixing an error on your report.